READING has had a major cash windfall from the Government, allaying fears it would be left out of pocket in the latest funding round.

READING has had a major cash windfall from the Government, allaying fears it would be left out of pocket in the latest funding round.

The town will get £92million from the Government next year, an inflation-busting 8.8 per cent increase on this year's allocation, to top up cash that comes from Council Tax.

The extra money may help keep down the expected Council Tax hike, although no figures have been set yet.

It had been feared the town's allocation would be cut as the Government tried to target cash towards deprived northern authorities. But it seems Reading, along with many London boroughs, has persuaded ministers their area's deprivation problems match those in the North. Cllr David Sutton, leader of Reading Council, admitted he was relieved the Government agreed Reading deserved a better deal.

He said: "I have to pay tribute to a lot of people at the council who have helped let the Government know about our position.

"There were special circumstances here and it is good to know those have been taken into account this time."

Reading's grant increase was proportionately better than some northern towns', including Blackpool and Blackburn.

It is thought the Government considered problems the council faced in improving some of the town's deprived areas.

Church ward and Whitley ward are among the 20 per cent most deprived wards in the country according to the Government's Index of Deprivation 2000.

However, Mr Sutton suggested the local authority still had some tough budget decisions to make before the Council Tax level is set.

He added: "There is still a lot of work to do, but we have to say it is good news - in that it is far better than we expected."

Martin Salter, MP for Reading West, backed the decision to offer unitary authorities extra money, but said more should be done to provide affordable housing.

He said: "It seems as if the Government is starting to acknowledge the huge pressures on councils in this area."

Wokingham will receive an 8.4 per cent increase in Government grant, while West Berkshire will see an eight per cent boost.

Cllr Frank Browne, leader of Wokingham Council, welcomed the news but warned there could still be budget pressures. He gave the thumbs-up to an extra £5.7 million coming the council's way, but stressed it was too early to discuss how Council Tax would be affected.

Mr Browne said: "I don't want to sound a killjoy because we are still number crunching, but this has got to take into account a whole series of fresh council pressures.

"There are increased National Insurance contributions for council employees and an above inflation increase in pay for teachers.

"We suspect the fire brigade will also receive an above inflation settlement and we also need to allow for increased costs on waste disposal.

There are lots of new pressures, but we welcome the increase considering we could be significantly worse off."

Mr Browne thinks recently published Census figures, which highlighted economic development in the area, may have influenced the rise. He also felt a decision had been made to plough more money into Wokingham's improving education system.